2023 (4) TMI 1146 - AT - Customs

Grant of interest on the amount of bank guarantee, which was wrongly encashed by the Customs Department - HELD THAT - The Revenue have encashed the bank guarantee for Rs.9,78,291/- on 17.05.2012, which matter already stands adjudicated vide order-in-original dated 18.06.2014, wherein it has been held that the appellant have completed the re-export obligations on 31.03.2012 and no amount was required to be recovered from them, upon issue of the show cause notice in May, 2012. Further, the said order-in-original dated 18.06.2014 has attained finality. Under the aforementioned facts and circumstances, it is held that the amount encashed by way of bank guarantee remained with the Revenue as deposit and accordingly with the meaning of Section 129 EE, the appellant is entitled to interest on refund from the date of deposit till the date of refund @6% p.a. Appeal allowed.

Summary

Issues involved: Restoration of appeal due to default for non-prosecution; Grant of interest on encashed bank guarantee.

Restoration of Appeal:
The appellant filed a miscellaneous application for restoration of their appeal due to non-prosecution, explaining that the default was unintentional and caused by COVID disturbances. The counsel urged for restoration, stating readiness for hearing on merits. After hearing the parties, the Tribunal deemed it fit to condone the default and restore the appeal for hearing on merits, which was allowed with the consent of both parties.

Grant of Interest on Encashed Bank Guarantee:
The appellant imported goods without duty payment, furnishing bank guarantees, which were later encashed by the Customs Department as the goods were not re-exported within the specified period. A show cause notice was dropped, holding the appellant entitled to a refund. However, the issue of interest on the refunded amount arose. The appellant claimed interest from the date of encashment till the refund date, which was rejected by the Adjudicating officer. The appellant appealed, arguing that they were entitled to interest as the amount remained with the Revenue as a deposit. After considering the contentions, the Tribunal held that the appellant was entitled to interest on the refund amount from the date of deposit till the refund date at the rate of 6% per annum, directing the Adjudicating Authority to grant the interest within 45 days. The appeal was allowed in favor of the appellant.